Haine v Secretary of State for Business Enterprise & Regulatory Reform & Anor

Haine v Secretary of State for Business Enterprise & Regulatory Reform & Anor

Protective awards made under section 189(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 are contingent liabilities arising from an obligation incurred before liquidation and are thus provable debts in the liquidation under rule 13.12(1)(b) of the Insolvency Rules 1986, notwithstanding the tribunal's discretion. The statutory scheme and EU Directive require such liabilities to be enforceable against the employer to ensure effective penalties for breach of consultation obligations.

Parties
1st Appellant: Ronald Benjamin Haine; 2nd Appellant: Secretary of State for Business Enterprise and Regulatory Reform; Respondent: Robert Day (Liquidator of Compound Sections Ltd)
Jurisdiction
England and Wales
Judgment Date
11 June 2008
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Provable Debts in Liquidation, Protective Awards Under Employment Law, Implementation of EU Directives, Contingent Liabilities, Employee Rights in Insolvency
Insolvency Law Employment Law European Union Law Provable Debts in Liquidation Protective Awards Under Employment Law Implementation of EU Directives Contingent Liabilities Employee Rights in Insolvency

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Parties

Ronald Benjamin Haine

1st Appellant

Secretary of State for Business Enterprise and Regulatory Reform

2nd Appellant

Robert Day (Liquidator of Compound Sections Ltd)

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether protective awards made under section 189(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 are provable debts in the liquidation of a company under the Insolvency Rules 1986
  2. 2 Whether such awards constitute contingent liabilities under rule 13.12(1)(b) of the Insolvency Rules 1986
  3. 3 Whether the existence of a tribunal discretion precludes the awards from being provable debts

Ratio Decidendi

Protective awards made under section 189(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 are contingent liabilities arising from an obligation incurred before liquidation and are thus provable debts in the liquidation under rule 13.12(1)(b) of the Insolvency Rules 1986, notwithstanding the tribunal's discretion. The statutory scheme and EU Directive require such liabilities to be enforceable against the employer to ensure effective penalties for breach of consultation obligations.

Court Disposition

Appeal allowed

Orders

  • Declaration that protective awards are provable debts in the liquidation under rule 13.12(1)(b) of the Insolvency Rules 1986